In a significant move to bolster India's energy security, Indian Oil Corp (IOC) has inked a long-term liquefied natural gas (LNG) supply agreement with Abu Dhabi National Oil Co (Adnoc). The deal, spanning 15 years, will see Adnoc supplying 1 million tons of LNG annually to IOC, primarily from its upcoming Ruwais project.

Strengthening Energy Ties

This new agreement builds upon an existing partnership between the two oil giants. IOC already has a contract with Adnoc for 1.20 million tons of LNG per year from its Das Island operations. With the addition of the new deal, IOC is set to become Adnoc's largest LNG customer by 2029, underscoring the growing energy cooperation between India and the United Arab Emirates.

Ruwais Project: Doubling Adnoc's LNG Capacity

The LNG for the new agreement will primarily come from Adnoc's Ruwais project, which is currently under construction. Expected to commence commercial operations in 2028, the Ruwais facility will play a crucial role in doubling Adnoc's LNG capacity to 15 million tons annually.

Strategic Importance for Both Parties

For Adnoc, this deal represents another step towards securing long-term customers for its expanded LNG production. The company has already committed over 8 million tons of the Ruwais project's 9.60 million-ton capacity to international customers through long-term agreements.

From India's perspective, this agreement aligns with the country's strategic plan to increase the share of natural gas in its energy mix by the end of the decade. As a cleaner-burning fossil fuel, LNG is expected to play a vital role in India's transition towards a more sustainable energy future.

Implications for Indian Oil Corp

For Indian Oil Corp, one of India's largest oil and gas companies, this deal ensures a stable, long-term supply of LNG. This security of supply is crucial for IOC's operations and its ability to meet the growing energy demands of the Indian market. The agreement also positions IOC as a key player in India's efforts to diversify its energy sources and reduce its carbon footprint.

Conclusion

As India continues to pursue its ambitious energy goals, partnerships like this one between IOC and Adnoc are likely to become increasingly important. They not only strengthen bilateral ties but also contribute significantly to the energy security and sustainable development of both nations.

Indian state-owned refiners Indian Oil Corp. and Bharat Petroleum Corp. have resumed their purchases of Russian Urals crude oil for September and October loading, following a brief pause. This decision comes amid escalating tensions with the United States, as threats of imposing 50% tariffs on Indian imports emerge, with half of these tariffs allegedly attributed to India's Russian oil trade.

US Criticism and Threats

The resumption of Russian oil purchases has drawn sharp criticism from US officials. White House Trade Adviser Peter Navarro accused India's oil lobby of profiteering from the trade, while Treasury Secretary Scott Bessent alleged that wealthy Indian families are benefiting from these transactions.

Market Factors and Discounts

The decision to resume purchases appears to be driven by market factors:

• The discount for Russian Urals crude has deepened to $2.50 per barrel, compared to $1.00 in July.
• This increased discount provides an additional incentive for Indian refiners.
• India maintains that its crude oil import decisions are based on market factors and national interests.

Geopolitical Implications

The ongoing tensions over oil trade have implications for India's international relations:

• India appears to be moving closer to Russia and China.
• Prime Minister Modi has referred to Russian President Putin as a friend.
• Modi is reportedly planning his first visit to China in seven years.
• This geopolitical shift comes after India had previously paused Russian oil buying following criticism and was asked to prepare pivot plans.

India's Stance

Despite the pressure from the US, India remains firm on its position:

• The country asserts that its crude imports are determined by market factors and national interests.
• India maintains that these decisions are not influenced by external pressures.

The situation highlights the complex interplay of global oil markets, geopolitical relationships, and economic interests. As India navigates these challenging waters, the decisions made by state refiners like Indian Oil Corp. and Bharat Petroleum Corp. will continue to be closely watched by international observers.